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The increase in the cost of food the last 2-3 decades is actually more mild than it has been in the past and over the last year it has not increased at all.
In pure definition terms that is true, however, in the real world where charts/graphs and definitions have to fit together declining wages i.e., less money to buy same/more at fixed price means on a dollar per dollar basis it is more expensive to buy said item.
Right...and as I said that is a completely different issue than whether the cost of food is going up in the aggregate.
Wages tend to be one of the first things to decrease when deflation hits an economy, slowly the cost of other things will match the fall in wages.
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Originally Posted by txgolfer130
Therefore the event has become...wait for it...inflationary.
This is gibberish, you are just abusing the term. There is nothing inflationary about it, what you are talking about is a completely different issue.
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Originally Posted by txgolfer130
And it is exactly the lag times that I'm referring to when referencing a sudden over the horizon event of hyper-inflation. SHOULD it occur, there will be little that can be done to minimize it's effect or results.
This is also gibberish, the FED can easily prevent hyper-inflation.
less money to buy same/more at fixed price means on a dollar per dollar basis it is more expensive to buy said item. Therefore the event has become...wait for it...inflationary.
Tex I agree with you on a personal finance basis. If your wages are cut (i.e. less money in YOUR case), that $40 fill up at the gas station cuts more into your monthly budget. More expensive on a "dollar per dollar" basis, as you say. . .
However from a macroeconomic perspective, you couldn't be more wrong.
Less money / same supply = DEFLATION
I think a lot of those in the inflation camp wrongfully look at the bailouts as cash injections into the "system". BUT --> If this cash sits in bank vaults unloaned, is it really in "the system"? Is it driving prices up by competing with existing dollars? Nope. In fact it doesn't exist at all, except on their balance sheets.
For anyone who believes that the money supply has greatly increased in the last couple years, I challenge you to add up the depreciation of assets (houses, businesses), and compare to what the government has created through stimulus. We've lost a lot more than we've "printed", sorry to say. Less money = deflation.
Feel free to actually demonstrate that the cost of food is actually "inflating". Of course all you guys do is yap, never is any actual data provided.....
I love it when people provide data they don't understand and didn't take the time to figure out, yet draw conclusions such as this. Why don't you go read up on the chart you presented. LOL It doesn't have anything to do with what we said. This ranks up there with the claims of xenophobic Japanese.
I love it when people provide data they don't understand and didn't take the time to figure out, yet draw conclusions such as this. Why don't you go read up on the chart you presented. LOL It doesn't have anything to do with what we said. .
So then I take it you have absolutely no data to support your claim? To quote you, you stated that " In fact it's amazing at how fast the cost of food is inflating". Yet, as the chart shows food has not increased over the last year and the increases in food have been mild over the last 2-3 decades.
Perhaps instead of supplying me with this insipid nonsense you could provide data that supports your claim?
I think a lot of those in the inflation camp wrongfully look at the bailouts as cash injections into the "system". BUT --> If this cash sits in bank vaults unloaned, is it really in "the system"? Is it driving prices up by competing with existing dollars? Nope. In fact it doesn't exist at all, except on their balance sheets.
The 12 month average means nothing. We all know how the game is played.
I see you believe in wizards. The commodity markets are far too large to be manipulated in the sense that you are implying. There was a brief bubble in some commodities, it was cause by well...people as yourself. People that thought "hyper-inflation" was in the bag, etc. When reality showed itself the bubble collapsed.
But commodity prices are not part of the CPI, food did not go up dramatically during the brief commodity bubble because it was so short.
Inflation is a non-issue right now. Its really funny too, because you guys talk about issues that are deflationary all the time, yet think there is going to be inflation. Its crazy really.
Food did not go up? Then explain this.
“Between 2006 and 2008 average world prices for rice rose by 217%, wheat by 136%, maize by 125% and soybeans by 107%.[5] In late April 2008 rice prices hit 24 cents (U.S.) per U.S. pound, more than doubling the price in just seven months.[6]” 2007–2008 world food price crisisFrom Wikipedia
If you want to see something really amazing, look at a chart of the price of chicken meat. It has gone parabolic.
Inflation is not a non issue, it is hitting people where they live because of what the inflation is on. The inflation on food, water, and energy are items that people pay for out of pocket, with real earnings. The deflation that is taking place is on things that are usually purchased with borrowed money. You may be able to walk away from a debt, but you still have to eat, and to put gas in your car. To deny the problems exist will only help them to persist. The only way we can get this country’s problems resolved is to admit what’s wrong and to make the changes necessary to turn things around.
Feel free to actually demonstrate that the cost of food is actually "inflating".
I have no interest or desire to demonstrate anything....period! The reality of higher food bills ( for the same items ) on a year to year basis ( by comparing actual receipts ), shows me with my own eyes that MY food bills are higher now than they were a year ago. That is quite enough to satisfy my definition of inflation, at least in regard to the food items that I purchase on a week to week basis. I make no claim about inflation across the board. There may be other things that I purchase that cost less today than they did a year ago, but not a d*mn thing comes to mind.
Inflation is a non-issue in the foreseeable future. Its amazing how many people think food, etc costs are going up when they are in fact going down.
You probably base your statement on some of the teaser prices for apples. We see grains and all other goods going upward. Look at gas prices, when they go up, so do transportation costs and that will be passed on to food and other items.
Coming from an ag background, I probably have a little better insight into the food production and distribution system than most. user-id is full of it if he thinks that food prices are not inflating--they are, and they are likely to continue to inflate. We've gotten a brief respite in food price inflation because of the moderation in energy prices. Bluntly put, the food distribution system we currently have in the US is a massive and inefficient energy hog. Thus, it is very sensitive to energy price changes. When fuel goes back up in price--and that has begun--food prices are going to inflate--drastically. The key to watch here is diesel fuel prices--since the entire food production and distribution system is heavily reliant on diesel fuel. The fact that diesel fuel prices are once again "inverted" compared to gasoline prices (meaning diesel costs more per gallon than gasoline) should be a real concern to everybody.
The second big energy component in food production is natural gas prices. Why? Because a large part of the fertilizers used in modern agriculture are produced by utilizing ammonia fixed from the atmosphere using the Haber-Bosch process that uses copious amounts of natural gas. See an article here:
A very salient and frightening sentence in this article is this:
Quote:
The Haber process is important because ammonia is difficult to produce on an industrial scale, and the fertilizer generated from the ammonia is responsible for sustaining one-third of the Earth's population.
It should scare the living hell out of people that we are supporting a world food production system that absolutely relies on non-renewable finite resources for much of its ability to produce.
So, when Helicopter Ben and his minions are busy debasing the US currency that we must use to import around 2/3's of our petroleum, people might want to think about the prospects of being able to afford to eat in a few years. And, when the drill, drill, drill crowd talks about using natural gas for all nature of things like fueling vehicles to perpetuate our auto-dependent, unsustainable, and debt-ridden suburban lifestyle, it might be wise for Americans to think about where the fertilizer will be coming from to grow crops in a few years as natural gas reserves decline from being used wastefully and stupidly. Not even the politicians could replace that much fertilizer--much as they are generating of it these days . . .
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